Chaiechi, Taha, Stoeckl, Natalie, Jarvis, Diane, Lewis, Stephen, and Brodie, Jon (2016) Assessing the impact of price changes and extreme climatic events on sediment loads in a large river catchment near the Great Barrier Reef. Australian Journal of Agricultural and Resource Economics, 60 (3). pp. 386-405.

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Abstract

Ocean turbidity (associated with sediment from rivers) can significantly impact reef health. In Australia, there are many plans to reduce sediment loads by encouraging best management practices; there is also interest in the use of market-based instruments. But it is exceedingly difficult to assess the potential efficacy of market policies, since that requires one to determine how changes in the socio-economic system (e.g. price changes) impact the biophysical (e.g. sediment loads). We use historical data (from 1938 to 2011) in a vector autoregression model to simultaneously model interactions between the economic and biophysical systems in the Burdekin River catchment adjacent to the Great Barrier Reef (GBR) lagoon. This allows us to statistically test for the impact of changes in prices on sediment load, while controlling for biophysical influences. We find that extreme events have the most impact on sediment loads, but that prices also impact sediment loads. Evidently market-based policies may have the potential to reduce sediment loads. Our empirical results provide useful information for those interested in the Burdekin River catchment and the GBR; the modelling approach may have wide applicability in a variety of contexts.

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